A slight chill in the air

A shadow hangs over the booming solar industry that no one can quite explain.

Big corporations have moved into the business. Homeowners, homebuilders, schools, even city halls are snapping up the technology. So why does fast-growing, progressive Oregon have fewer solar-heated homes today than in 1990?

No one knows for sure.

Next door, Washington State saw its total of solar-heated homes fall by half between 1990 and 2000, according to new census data. So did Kansas and New Hampshire, with Illinois (down 32 percent) and Nevada (down 42 percent) not far behind. Of the 22 states for which the Census Bureau has released data, only three saw an increase. Even there, gains were minimal.

These numbers so baffle solar-power experts that many dismiss them out of hand. They're seeing a renaissance of solar and other green building technologies. And, admittedly, homes that rely mainly on solar heat represent a small share of the households that tap the sun to heat their hot water, keep their pools comfortable, and create electricity.

Still, the decline suggests two trends. First, today's designers are using solar heating as a savvy complement to other fuels rather than as a replacement. Second, solar's first boom, fueled by federal tax incentives in the late 1970s and early '80s, proved to be an unsustainable fad.

It's that last conclusion that casts the troubling shadow. While builders are installing new systems at breakneck speed, they're also ripping out old ones. "There were a lot of systems in the late '70s and early '80s that weren't properly done," says Richard Perez, publisher of Home Power magazine in Ashland, Ore.

The challenge now facing the industry is to make sure that this second boom doesn't repeat the mistakes of the first.

When architect Craig Weston designed his first home 17 years ago, he wanted it as fuel-efficient as possible. He oriented the structure the right way, built a massive chimney to absorb the rays of the winter sun, installed a brick floor, and put in a wood stove. The house cost less than $100 to heat in the winter, since he could burn wood from the forest out back.

But as his family increased and his St. Louis suburb developed, he grew dissatisfied. He had to pay for wood now. Lugging in the logs was dull and dirty work. His heat-collecting greenhouse required constant attention. And the brick floor kept getting dirty. "You needed an instructional manual to live in it," he recalls.

So in 1997, when he designed his family's next passive-solar house, he nixed the wood stove, the greenhouse, and the brick floor. Gas heat supplements the solar heat trapped in the winter. The dark ceramic tile on the first floor doesn't absorb heat as well as brick but it's easier to clean.

"We do no work here," says Mr. Weston contentedly. Yet, this extremely well-insulated, properly oriented structure has less than half the heating costs of the homes of some of his neighbors. During the area's notoriously hot summers, he pays no more than $40 a month on air conditioning.

Meanwhile, the people who bought his old home have removed some of its energy-saving features and no longer use others. Indeed, many people have turned their backs on sun-powered technology that once fired their imaginations.

Some do it for aesthetic reasons; others, because of economics. Solar advocates say it doesn't make economic sense to tear out systems providing essentially free energy if they're already paid for. But life isn't always so simple.

Two decades ago, Phil Best put solar collectors on his garage to heat water in his Mansfield Center, Conn., home. For 15 years, the system cut substantially the amount he spent running his electric water heater. But in 1995, he changed to cheaper oil heat and disconnected the solar heat.

"It was just not viable," he explains. The location of the oil-fired heater would have meant running a copper pipe the length of the house. And the solar system itself needed work.

As a physics professor at the University of Connecticut, Dr. Best had done the maintenance himself. But often, solar hot-water homeowners need outside help. And that's difficult, because most solar companies went out of business after federal solar tax credits ended in 1985.

These trends likely explain the decline of solar homes during the 1990s, especially in states that had aggressively pushed the technology. In 1990, Massachusetts boasted 1,000 solar-heated homes; by 2000, that had fallen to 400.

In addition, solar homes typically rely on other fuels as well. So when the census asked homeowners for the main fuel that heated their homes, few would check "solar." Of the 666,000 households in Nebraska, for example, only 124 identified themselves as "solar" in 2000.

Such numbers are so small that statisticians use them cautiously. In California, one of only a few states that saw an increase in solar-heated homes, the numbers look fairly solid because the state has so many solar-heated homes (13,508). But North Dakota's 8-percent increase looks suspect because the total is only 39.

Then there's the question of whether census respondents distinguished, say, solar-electric panels from hot-water collectors. "People think solar is this monolithic technology. [But] you're talking about a whole lot of different technologies," says Maureen McIntyre, editor of Solar Today.

In all, the United States boasts an estimated 1 million households using either solar pool-heating or hot-water systems. Another 9,000 homes use solar panels to generate some of their electricity, estimates Mr. Perez of Home Power magazine. And business is booming for pool systems and electric systems as well as those who incorporate them into new buildings.

"We're busier than we've ever been," says Steven Strong, a longtime solar designer and founder of Solar Design Associates in Harvard, Mass.

But one sector is not booming: hot-water systems, which skyrocketed in an earlier euphoric period. In Florida, for example, homeowners are installing solar-pool systems at more than three times the pace they're putting in hot-water systems. Why? Partly because of the bad reputation they earned in the 1980s, experts say, and partly because of large up-front cost.

Still, a hot-water system makes more economic sense than putting up solar-electric panels. It costs roughly a third to install, says Tim Merrigan, program manager for solar buildings at the National Renewable Energy Laboratory (NREL) in Golden, Colo. And payback is faster. NREL is working on an Energy Department program to halve the cost of solar hot water using new materials.

"It's perplexing there aren't more solar-thermal systems," says Terry Peterson, manager of solar-power and green-power marketing at Electric Power Research Institute in Palo Alto, Calif. "The people buying solar electric certainly aren't mainstream consumers, and they're buying for non-economic reasons. It's a whiz-bang technology as opposed to something that sits in the sun and gets hot."

That sounds suspiciously like some of the earlier enthusiasm for solar thermal. "It's kind of a sad commentary on public policy," says Freeman Ford, founder of FAFCO, the nation's oldest and largest manufacturer of solar pool-heating systems. "In the early '80s, the market got up to about $600 million in sales – that was several hundred thousand domestic hot-water heaters that turned out to be a tax-credit bubble." From a peak of some 250 companies, Mr. Ford saw his competitors shrink to four.

Many solar experts say the industry has learned its lesson and that today's boom is far more broadly based. Solar-panel manufacturers are producing for world markets, not just the US, says Mr. Merrigan of NREL. Others are more skeptical.

Howard Hayden is a retired professor and author of a new book: "The Solar Fraud: Why Solar Energy Won't Run the World." "Solar energy is forever," he says, "but solar collectors are not."